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Interim Olympic Delivery Authority (“Ioda”) Published a Set of Procurement Principles (“The Principles”) to Map out the Core Values for the Procurement Activities

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Olympic Delivery Authority

Procurement Policy (draft for consultation)

FOREWORD

The opening ceremony for the London 2012 Olympic Games will take place on 27 July 2012. The Olympic Games and Paralympic Games that follow them will be great events, providing memorable moments for millions, in London and across the world.

The Olympic Delivery Authority (“ODA”) has been established to deliver new venues and infrastructure for the Games and to facilitate the Legacy – the Games will last six weeks, but the social, environmental and economic benefits will have a far longer reach.

The challenge for the ODA, operating under unparalleled scrutiny, is to deliver the Games and the Legacy in a sustainable way, on time and to budget. To do this, we will need to work with some of the best designers and construction companies in the world, many of them based in the UK. We will need to procure and manage the delivery of goods and services in a way that enables us to deliver on time against a tight budget, and to benefit from the innovation and creativity that these companies can offer, but also to help to realise the aspirations and commitments set out in London’s bid and inspired by London’s Olympic vision. The Procurement Policy detailed in this document sets out how ODA intend to do this and to provide clarity to current and potential suppliers and the wide range of stakeholders that have an interest in how the ODA delivers its functions.

The ODA has sought to share a common procurement approach with that of the London Organising Committee for the Olympic Games, the Greater London Authority and the London Development Agency to achieve sustainable development by maximising the economic, social, health and environmental benefits of the Games. This will be achieved particularly through regeneration including issues of employment, skills, culture, health, education, volunteering, housing, energy, waste and community engagement, amongst others at a local, national and international level.

This Procurement Policy sits above a set of more detailed procurement documentation and sustainability plans. The Policy has been prepared using the best industry and public procurement practice as codified by the Office for Government Commerce (“OGC”) and tailored to meet the specific needs of the ODA. It is structured to assist the ODA to comply with the requirements of OGC GatewayTM Reviews which will be undertaken at key stages throughout the programme. We would like to thank the OGC, Greater London Authority, Partnerships UK and other partners who have helped us to develop this document.

This public document is available to all interested parties and will be on the London 2012 website.

Jack Lemley - Chairman 11 July 2006

CONTENTS

1. 2. 3. 4. 5. 6. 7. 8.

  • Introduction
  • 1

  • Delivering the Programme
  • 6

The Procurement Framework Governance
811 13 15 18 25
Management of Risk and Opportunity Seeking and Obtaining Value for Money Procurement Values Communication and Stakeholder Engagement

Annex A Annex B Annex C

  • Olympic & Paralympic Games
  • 27

28 30
Definition of Terms, Reference Organisations and Websites Consultation for document

  • 1
  • INTRODUCTION

Background

  • 1.1
  • The delivery of the London 2012 Olympic Games and Paralympic Games and their

legacy (“the Games and Legacy”) is like no other programme of work. The scale and specialist requirements, coupled with the immoveable deadline for delivery, create a set of specific and unique challenges.

1.2

1.3
The delivery and funding of the Games and Legacy are joint public/private sector endeavours. The UK Government and the Mayor of London have provided guarantees to the International Olympic Committee (“IOC”) and are responsible for delivery, funding and its financial success.

The Procurement Principles

On 7th September 2005, the Interim Olympic Delivery Authority (“iODA”) published a set of Procurement Principles (“the Principles”) to map out the core values for the procurement activities. The Principles were developed on the understanding that the preparations for the Games are preparations for a greater prize i.e:

•••

the events themselves; their transformational impact; and their lasting, positive legacy – physical, social, sporting, environmental and economic.

  • 1.4
  • In line with the Objectives of the Olympic Board, the fundamentals underlying the

Principles were:

•

the delivery of the Venues and Infrastructure:

---

in a technically satisfactory and commercially viable state; to programme; and to budget while achieving Value for Money (“VfM”).

•

the achievement of the legacy, reflecting:

---

the aspirations and commitment of the Olympic Bid; the development of London as an exemplary, sustainable world city; strong, long-term and diverse economic growth locally, regionally and nationally;

--

fundamental improvements in the environment and in the way in which resources are used; and

the regeneration and development, benefiting the local communities and the wider Thames Gateway.

1

  • 1.5
  • In the preparation of the Procurement Policy the ODA has been mindful of supporting

the GLA’s Olympic and Paralympic Games Programme Objectives (Annex A) of which the principles are:

•

To host an inspirational, safe and inclusive Olympic and Paralympic Games and leave a sustainable legacy for London and the UK:

--

To stage an inspirational Olympic Games and Paralympic Games; To deliver the Olympic Park and all venues on time, within agreed budget, to specification and providing for a sustainable legacy;

--

To maximise the economic, social, health and environmental benefits of the Games for the UK, particularly through regeneration and sustainable development; and

To achieve a sustained improvement in UK sport before, during and after the Games.

  • 1.6
  • The ODA subscribes to integrated/collaborative procurement approaches and to the

principles of the Egan and Latham reports and OGC's Achieving Excellence in Construction Initiative. In particular, the ODA will apply these principles, the good practice, codified by the OGC in its suite of Achieving Excellence best practice guidance and The Common Minimum Standards for the Built Environment. Where necessary ODA will seek advice from the OGC on these matters.

Minister’s Statement

  • 1.7
  • When launching the first Olympics Business Summit on January 24th 2006, Tessa

Jowell, Minister at the Department of Culture, Media and Sport, with responsibility for the 2012 Games, said:

“So today’s summit signals that determination to ensure the economic benefits from the Games are maximised for all UK based businesses and workers. The Government will be spending £3bn on physical infrastructure for the Games and we want that money to work to the maximum benefit of our economy. This doesn’t mean simply an outdated ‘Buy British’ campaign, but we do want to ensure that the public money spent on the Games is recycled into the British economy wherever possible to the benefit of British based companies and the people working in them.”

1.8

1.9
The Mayor of London has made it clear that procurement must be done in a way that maximises benefits in terms of equality and regeneration. This is in line with the key overall objective that the London 2012 Games provide major regeneration benefits, particularly in East London.

Ensuring Sustainable Procurements

The ODA has sought to share a common procurement approach with that of the London Organising Committee for the Olympic Games, the Greater London Authority and the London Development Agency to achieve sustainable development by maximising the economic, social, health and environmental benefits of the Games.

2

This will be achieved particularly through regeneration including issues of employment, skills, culture, health, education, volunteering, housing, energy, waste and community engagement, amongst others at a local, national and international level.

1.10 It is a requirement of the key stakeholders that wherever possible, and not in contradiction with the EU Public Procurement Directives, there are benefits to London’s diverse communities as well as the UK as a whole both in the run-up to and during the Games, and in the significantly longer term of the Legacy. The Procurement Policy is designed to ensure a planned and consistent approach to achieving these goals.

1.11 The principles of sustainable development (i.e. positive impacts on society and the environment of the Games and the Legacy) are embodied within the Candidate File - Towards a One Planet Olympics, available online at www.london2012.com

1.12 The ODA will work to use its purchasing power to support sustainable development in London and the UK. In line with the guidance from the Government sponsored Sustainability Procurement Task Force, the Greater London Authority Group’s Sustainable Procurement Policy and the OGC guidance on sustainable procurement; that all sound procurements support sustainability, the ODA will ensure that sustainability is integrated into Business Cases, Procurement Plans and related contracts.

The Procurement Policy

1.13 Among the undertakings in the Principles was the development of a Procurement
Policy (“the Policy”) which is this document.

1.14 The Policy reflects the Principles and also takes into account:

••

the current EU procurement legislation and the UK’s corresponding enabling legislation;

the responsibility of the ODA Chief Executive, as Accounting Officer of the ODA, to ensure compliance with the Government’s procurement policy as set out in “Government Accounting, Chapter 22”, available at www.government-

accounting.gov.uk; and

•

the criticality of procurement and delivery in respect of time and risk.
1.15 The London Organising Committee for the Olympic Games (“LOCOG”), Transport for
London (“TfL”) and the London Development Agency (“LDA”) will also be responsible for procurement of contracts for goods, works and services in connection with the Games. Where possible, the ODA aims to share a common procurement approach.

Relationship between Key Documents

1.16 Within the Programme for the Games and Legacy, different venues and elements of infrastructure will be broken down into a series of separate projects, within which a number of contracts/services will need to be procured, each with particular procurement characteristics.

3

1.17 To provide a platform for these procurements, the Policy will be supported by a suite of documents which is being developed. These include the Procurement Process and Procurement Procedures and Detailed Working Instructions which combine to form the Procurement Code (“the Code”).

1.18 The purpose of these supporting documents is to provide:

•

clear understanding of the means by which the Policy will be pursued in practice; and

•

clear and detailed direction on how to conduct the procurement.
1.19 Each separate project will require a Procurement Plan which reflects the Policy and the Code.

1.20 The diagram overleaf shows the hierarchy and inter-relationship of ODA documents both in existence and under development which are relevant to procurement.

ODA

Management Statement
Financial
Memorandum & Standing Orders
Programme
Plan

  • Corporate Plan
  • Master Plan

Procurement
Policy

Project A
Procurement

Process
(E.g. Main Stadium)
Project B
Business Case incl.
Business

Case incl.
Project C Business
Procurement Plans
Procurement
Case incl.

Procurement
Plans
Plans

“the CODE”

Procurement Procedures and
Detailed Working Instructions

Scope of the Policy

1.21 The Policy applies to all procurement activity undertaken by the ODA in connection with the Games and Legacy, both within and beyond the Olympic Park.

1.22 Procurement activity for the Games and Legacy will be diverse in its scope and will cover:

4

•

Services - people and teams to plan, guide, design, build, commission, operate and service the facilities as well as the conversion of those legacy venues beyond the conclusion of the Games;

••

Goods - goods and commodities and the supply of the same; and Works - construction and commissioning of venues, supporting structures and infrastructure and legacy conversion works.

This Document

1.23 This document comprises the following sections:

•

Delivering the Programme – provides an introduction to the timetable, programme and project management approach, the master plan and the delivery partner;

•

The Procurement Framework – outlines the mechanics of the procurement process within the public contracting regulations and primary commercial matters;

••

Governance – addresses approvals, probity and transparency; Risk and Risk Management – outlines how, in the face of the many and varied risks associated with the programme, these need to be regularly monitored and managed to ensure the most effective balance between programme certainty, cost quality and scope;

•••

Obtaining Value for Money – using public money involves both identifying and meeting stakeholder requirements whilst at the same time offering the best possible value for money. This approach is not limited to the sole criterion of cost and must include the sustainable requirements of the Legacy;

Procurement Values – lays out the values which the ODA is promoting throughout their procurement activity. These include, among others, sustainability, occupational health and safety, promoting design excellence, embedding quality and environmentally responsible procurement; and

Communication and Stakeholder Engagement – lays out the ODA’s approach to communication with industry and potential suppliers as well as other intermediaries and communities.

5

  • 2
  • DELIVERING THE PROGRAMME

The Programme Plan – Timescale

  • 2.1
  • The fundamental requirement of the Programme Plan, and therefore a critical plank

of the Policy, is to achieve the immoveable end date. The timescale is as outlined below.

Activity
Planning and Design

  • 2006
  • 2007 2008 2009 2010 2011 2012

Enabling and Construction Olympic Overlay and Test Events

The Master Plan – Scope

2.2 2.3
Outline planning permission has been secured to build the Olympic Park and Venues. The Master Plan associated with that consent sets out the main locations for the various venues and the boundaries of the park. The Master Plan provides the vision of what the ODA will procure, but not the detail of how this will be done.

Programme and Project Management

Since January 2006, the ODA and its predecessors have been revalidating and reviewing the Master Plan to ensure that they can deliver the best possible Games and Legacy. This process is now drawing to a close, though there will be continual review of the details of the Master Plan and the Programme Plan adding clarity as more precise details are obtained, and as planned activity becomes actual and then completed.

2.4

2.5
The links and dependencies of each element of procurement activity and the relationship of the same to the Programme Plan will need to be continually reviewed and revised as the individual projects progress.

The ODA is developing a contract packaging approach which breaks down the entire programme of venues and infrastructure into suitable elements for procurement. Business Cases including the related Procurement Plans will be prepared for each project reflecting the procurement options and contract packaging strategy. These will be subject to discussion and early resolution with the potential suppliers and contractors.

2.6

2.7
To meet the tight timescale and budget it is necessary to procure and execute a large number and wide range of projects and contracts, some in parallel and some sequentially. Each of these will need to be closely monitored and progressed in a manner which is robust, transparent and professional whilst the risks associated with the Programme and related Projects will be carefully monitored and managed.

The ODA will follow the good practice guidance on Programme and Project Management as laid out in the “Office of Government Commerce’s (“OGC’s”)

Successful Delivery Toolkit” and “Achieving Excellence in Construction” both

available online at www.ogc.gov.uk.

6

2.8 2.9

As the Programme of Projects for the Games and the Legacy progress, ODA will promote continuous improvement by ensuring that ODA, its contractors and their sub-contractors, transfer into and take on board lessons learnt from one project to the next similar project. This will include, where appropriate, lessons that have been learnt from earlier Olympic Games.

For each project or cluster of projects, the Gateway ReviewTM process will provide a regime for independent health checks throughout the life of a procurement project at key decision points and be reflected in the Programme Plan. Information on the OGC GatewayTM Review Process is available online at www.ogc.gov.uk.

The Delivery Partner

2.10 A key to successful delivery of the Games and the Legacy is for the ODA to procure then provide direction and leadership to a major chain of professionals, suppliers and contractors.

2.11 The ODA has made clear its intent to be a “thin” Contracting Authority providing strategic leadership and acting in the role of intelligent client to suppliers, contractors and the supply chain.

2.12 The ODA will appoint a Delivery Partner who will provide resource, management, technical capability and systems to manage the planning, design, procurement and delivery of the construction for the venues and infrastructure. Throughout the procurement and management of construction, the Delivery Partner will have a critical role to play in managing risk and opportunity. Whilst the Delivery Partner will be undertaking the majority of procurements associated with the Programme, ODA will always remain the Contracting Authority.

2.13 The Delivery Partner, contractors and sub-contractors will be responsible for operating within the ODA Procurement Policy and the Code. Therefore, references to the ODA should be taken as also meaning the Delivery Partner where appropriate.

2.14 The level of use and application of the Procurement Policy and Code by either the
ODA or the Delivery Partner will be dependent on the particular procurement taking place and the Delivery Partner may be required to develop its own more detailed procurement procedures.

7

  • 3
  • THE PROCUREMENT FRAMEWORK

The Governing Legal Framework

  • 3.1
  • It is a statutory obligation for the ODA to comply with the Public Contracting

Regulations (“the Regulations”) which are the European Union’s Public Procurement Directives and the UK’s Enabling Legislation. The purpose of the Regulations is to ensure competitions for public contracts are open and fair.

3.2

3.3 3.4
The ODA recognises that it is particularly important to avoid any discriminatory actions which could put the Games and Legacy timetable at risk.

The Regulations define a number of alternative methods of running public competitions (referred to as “Procedures”), each with mandatory timescales.

The policy is to use the most appropriate Procedure, for each procurement, taking into account the specific characteristics, the likely level of market interest and the timetable requirements. As part of the Business Case for each project the Procurement Plan will be required to examine the available procurement options, and recommend the appropriate solution.

3.5

3.6
Where appropriate and when needed to shorten the delivery timetable, the ODA may use a range of tools such as Framework Agreements and dynamic purchasing systems (e.g. Zanzibar) which comply with the Regulations rather than running ODA competitions. These may be from the OGC, English Partnerships or other Government Departments.

The ODA also plans to set up its own Framework Agreements and Panels (e.g. Legal) which comply with the Regulations and are accessible to others involved in the Games and the Legacy.

Electronic Procurement

3.7 3.8 3.9
Electronic procurement has demonstrated tangible savings at an operational level. As a consequence, the ODA will use e-procurement systems as appropriate to openly advertise its contracting opportunities, negotiate prices in a transparent and auditable manner.

ODA will encourage its supply chain to trade electronically yet is mindful that such electronic procedures should not disadvantage those who are not in a position to do so, or where organisations with such a facility would have an unfair advantage over those which have not.

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    The BBC’s processes for the management of sports rights Review by MTM London Ltd presented to the BBC Trust’s Finance and Compliance Committee, 13th January 2011 DEPARTMENT FOR CULTURE, MEDIA AND SPORT The BBC’s processes for the management of sports rights Review by MTM London Ltd presented to the BBC Trust’s Finance and Compliance Committee Presented to Parliament by the Secretary of State for Culture, Olympics, Media and Sport by Command of Her Majesty March 2011 © BBC 2011 The text of this document may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not in a misleading context. The material must be acknowledged as BBC copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. BBC Trust response to the Value for Money Study ‘The BBC’s processes for the management of sports rights’ Background to this study As the BBC’s governing body, the BBC Trust acts to get the best out of the BBC for licence fee payers. In part this means ensuring that the BBC continues to provide excellent value for money. We commission Value for Money investigations into specific areas of BBC activity to help ensure that licence fee payers are getting the best possible return on every pound of their licence fee. Each year the Trust commissions a series of Value for Money studies. The studies are generally undertaken by external and independent agencies, including the National Audit Office and external consultants, reporting to the Trust.
  • Promotional Campaign to Local Authorities to Increase The

    Promotional Campaign to Local Authorities to Increase The

    Creating markets for recycled resources es at g Aggre Promotional Campaign to Local port: Authorities to increase the specification, Re procurement and use of recycled and secondary aggregates in Highway and Street Maintenance Project Code: AGG0051 FINAL VERSION 11/05/05 Date of commencement: September 2004 Finish date: April 2005 Written by: Gilli Hobbs, Katherine Adams – BRE Murray Reid, Mary Treen - TRL Published by: The Waste & Resources Action Programme The Old Academy, 21 Horse Fair, Banbury, Oxon OX16 0AH Tel: 01295 819900 Fax: 01295 819911 www.wrap.org.uk WRAP Business Helpline: Freephone: 0808 100 2040 27th May 2005 ISBN: 1-84405-202-8 Prepared by Katherine Adams, Murray Reid and Name Mary Treen Position Project team Approved on behalf of BRE Signature Name Gilli Hobbs Director Centre for Resource Position Management Date 27th May 2005 BRE Bucknalls Lane Garston Watford WD25 9XX Tel : 01923 664000 Fax : 01923 664010 Email : [email protected] Website : www.bre.co.uk 1 Promotional Campaign to Local Authorities – Recycled Roads Executive Summary Over the period January to March, 2005 a series of highly successful interactive workshops was run for local authorities throughout England to help them maximise the use of recycled and secondary aggregates (RSA) in highways and street maintenance. ‘Recycled Roads – Building Knowledge, Engineering Confidence’ was a series of ten events funded by WRAP and managed by BRE and TRL. Almost 500 delegates attended, drawn from over 100 local authorities, their advisors and suppliers and each event in the series generated highly positive feedback and a real appreciation of the opportunities and benefits of using recycled materials.
  • Sustainable Procurement Building Our Supply Chain to 2020

    Sustainable Procurement Building Our Supply Chain to 2020

    Sustainable Procurement Building our Supply Chain to 2020 Presentation for Constructing Excellence South West March 2015 Head of Procurement: Mike Davies Everything we do is about delivering the services our customers depend on in the most efficient and sustainable way possible The people we serve Pure Water Pure Service Pure Environment Looking to the future Ongoing Meeting rising Protecting and investment customer enhancing the requirements expectations environment Underpinned by a sustainable supply chain Efficiency and value for money is vital Sustainable supply chain • Represents value for money • Delivers the services and improvements our customers, stakeholders and regulators expect • Delivers efficiency through innovation • Values collaboration as integral to success • Shared values (service ethic, environmental standards) • Supports regional economy Building our Supply Chain to 2020 Strategic Contracts K5 to K6 Transition IWDS Kier MG 3 Yr Extension Futher Extension Option Leak Detection Hydrosave In-sourced SWW Interworks Tankering Gregory 7 Yr Extension Jetting & Vactoring Clear-Flow 7 Yr Extension Biosolids Recycling Veolia Organics Gregory Extension Option Private Sewers MetroRod | UKND Metro Rod | Clear-Flow Extension Option Electricity Total 2 Yr Extension Tender New Contract Customer Services Accenture Tata Extension Option (Offshore) H50 Contractors Balfour Beatty | Interserve 2 Yr Extension Extension Option H50 Consultants Hyder | Pell Frischmann 2 Yr Extension Extension Option MEICA Contractors Kier MG | Nomenca | Tecker | Bridges Extension Option Dev Services Rehab & DG3 Kier MG Extension Option Sewerage Capital reactive Kier MG Extension Option 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Background What’s different for PR14 • Output based Final Determination • Outcomes based business plan developed and owned by each company • High level of prescription for • Companies’ decision on how to business plan structure structure and write up business plans.